South Korea unveils Housing Supply measures in the Real Estate Market in bid to Curb Rising Prices
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Loading... - Touki Yuma
- 08 Aug 2024
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South Korea announced plans on Thursday to ease regulations and increase government support to significantly boost the supply of real estate, aiming to build more than 400,000 new homes over the next six years. This initiative is in response to the recent surge in property prices in Seoul, which saw its sharpest rise in over two years in June, reversing a six-month decline. The rapid increase in housing costs has raised concerns about a potential spike in household debt, which is already high in South Korea.
To stabilize the real estate market and manage liquidity, the government plans to accelerate existing projects that target the construction of 217,000 homes in Seoul and nearby cities, while also initiating new projects to add at least 210,000 more homes. This is a significant move considering that in 2023, Seoul and the surrounding Gyeonggi province housed about 8 million homes.
Finance Minister Choi Sang-mok emphasized that ensuring an adequate supply of housing and managing liquidity are essential for market stability. The government's strategy includes loosening regulations on reconstruction projects, simplifying approval processes, and opening up "green belt" areas around Seoul for development. Additionally, the government intends to raise the limit on loan guarantees for builders to support liquidity.
The plan also includes an increase in the supply of public housing for rent, particularly in Seoul, until the apartment supply conditions in the capital stabilize. Furthermore, the government will offer or extend tax cuts for construction firms, rental businesses, and first-time buyers of small homes, to further incentivize the expansion of the housing market. These measures are aimed at curbing the steep rise in property prices and addressing the broader concerns of affordability and household debt.
